Can’t Pay Your Taxes? FTB Offers Help

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Sacramento — With tax season in full swing, Franchise Tax Board Chair Betty T. Yee advises taxpayers who face financial hardship to contact FTB to discuss their many options.

“We realize that unexpected events can sometimes make it hard to pay your taxes on time,” State Controller and FTB Chair Yee said. “If you are having financial issues and can’t pay your taxes in full, FTB can help.”

File the Tax Return

First and foremost, taxpayers should reduce the potential for penalties by filing state tax returns on time and paying what they can. After receiving by mail a Notice of State Income Tax Due, these taxpayers can consider other assistance programs administered by FTB.

Payment Plans

If the taxpayer owes less than $25,000 and can pay off the balance within five years, FTB generally approves a monthly installment agreement. In most such cases, FTB does not file a lien. Taxpayers can request an installment agreement online at ftb.ca.gov by selecting “Installment agreement request” under “All payment options” or by calling our automated phone line at 800.689.4776. Service is available in English and Spanish.

Businesses that cannot pay the total balance in 90 days because of financial hardship may also enter into an installment agreement. FTB determines if a business qualifies and how long it will have to pay off the balance. Businesses within the United States can call 888.635.0494.

Credit Cards

All individual and business taxpayers can pay their taxes with a Discover, MasterCard, Visa, or American Express Card. See FTB’s website or go directly to www.officialpayments.com.

Offer in Compromise

An Offer in Compromise (OIC) is for taxpayers who, in the foreseeable future, lack the income, assets, or other means to pay their taxes. In an OIC, FTB agrees to settle for less than the full amount owed after considering the taxpayer's income and assets. Generally, FTB will not accept an offer if FTB believes the liability can be paid in full or through an installment agreement. For more information, go to ftb.ca.gov and search for Offer in Compromise.

Help with State Tax Liens

If a person has a state tax lien and is trying to sell or refinance a home, FTB can help. State tax liens typically must be paid before real estate can be sold or refinanced. If the home is being sold for less than the loan balance, and the taxpayer is experiencing a financial hardship, FTB may “subordinate” the lien to allow the sale or refinancing to go through. However, the tax lien remains in effect on any other property the taxpayer holds or later acquires. For more information, go to ftb.ca.gov and search for Lien.

FTB administers two of California's major tax programs: Personal Income Tax and the Corporation Tax. FTB also administers other non tax programs and delinquent debt collection functions, including delinquent vehicle registration debt collections on behalf of the Department of Motor Vehicles, and court–ordered debt. Annually, FTB’s tax programs collect more than 70 percent of the state’s general fund. For more information on other taxes and fees in California, visit taxes.ca.gov.